HSPH Professor Assists in Vermont Reform

With federal health care reform remaining a hot-button issue, Vermont became the first state to establish a single-payer health care system in May that was based on a plan outlined by School of Public Health Economics Professor William C. Hsiao.

Hsiao’s work in Vermont has begun to capture the attention of other states interested in his consultation.

The single-payer health care system—Hsiao’s area of expertise—is designed to provide basic benefits to all citizens through a single publicly-financed insurance fund with uniform coverage and rates.

In the spring of 2010, Hsiao agreed to lead a study for the Vermont legislature to analyze the costs and benefits of alternative health care systems. His analysis provided the framework for the “H202” bill, which marked the first time a state enacted a systemic, single-payer health plan in the United States.

“The research I’m doing is to really apply economic theory and political economy to solve the health care problems in the United States and elsewhere,” said Hsiao.

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Earlier this week, Hsiao presented his work on the single-payer system to the Colorado legislature. He has been asked to do the same for the Massachusetts legislature later this year.

“If Vermont shows it can [implement the single-payer plan], and show really good results for Vermonters, other states will follow,” said Hsiao.

However, he added that every state has a different set of political constraints—twelve states have already attempted to implement a single-payer health care system in the past.

“What we did in Vermont cannot be simply replicated for other states,” Hsiao said.

Nor can the Vermont plan be applied directly to national reform, he added. Though the Patient Protection and Affordable Care Act passed by Congress in 2010 aims to extend coverage to over 30 million uninsured Americans, Hsiao said it failed to address the rapidly increasing cost of health care—the more systemic problem facing the United States.

Steven Kappel, a Vermont-based analyst who worked with Hsiao, agrees that these soaring costs are tremendously dangerous.

“Vermont is no different than anywhere else; our labor costs are probably going to double in the next few years,” he said.

Unlike most states, Vermont’s efforts at health care reform stretch back almost 20 years. For states whose reforms face an even more contentious landscape, Hsiao says, the challenges will be more complex.